Student Fund Beats The Indexes
The Golden Gopher Growth Fund, the first student-managed mutual fund at the University of Minnesota, is not exactly shattering records: It's off nearly 9.4 percent since its May inception.
But the plucky fund of Minnesota small-company stocks is beating the small company indexes. Over the same period, the Russell 2000 index was down 18.3 percent, the Wilshire Small Cap index was off 20.06 percent and the Bloomberg Minnesota Index fell 14.3 percent, according to the school.
The fund has also drawn the attention of an institutional investor. Norwest Bank (soon to merge with Wells Fargo (WFC), and its Norwest Foundation, announced it will be investing $1 million.
While the return for investors has yet to be proven, the fund does pay off in other ways. Students learn to perform real-world fundamental research, recommend stocks, assist in trades, monitor investments and report to clients.
"Everyone benefits from the program," said David Kidwell, dean of the Carlson School. "The financial community will get a supply of trained, highly experienced equity analysts and money managers, and the school, with its improved programming and support, will enhance its reputation as a great place to recruit new finance industry talent."
Last year, 21 MBA students spent up to 160 hours each researching small companies in seven sectors to find stock recommendations for the Golden Gopher Growth Fund. The students visited the companies, interviewed management and even talked to suppliers to gauge the companies' fundamental value and prospects.The number of stocks in the portfolio are expected to rise to 20 from its six current holdings. They are:
- ASV Inc. (ASVI)
- ATS Medical (ATSI)
- Secure Computing (SCUR)
- Ciprico Systems (CPCI)
- FSI International (FSII)
- Urologix (ULGX)
The school estimates assets under management will grow from the current $2 million to $5 million to $10 million within three years.
Written By Craig Tolliver